Under the European fifth anti-money laundering directive (Directive 2018/843, hereinafter: the Directive), Member States must ensure that crypto service providers are registered. In the Netherlands, registration takes place with DNB and requires a provider of crypto services to submit data relating to compliance with regulations under the Anti-Money Laundering and Terrorist Financing Act (Wwft) or the Sanctions Act 1977 (Sw). According to DNB, this means, among other things, that providers of crypto services must verify for each individual transaction to whom the crypto address of the beneficiary of the transaction belongs.

Bitonic offers exchange services of fiat currency to bitcoin and vice versa and operates a platform for trading bitcoin and litecoin. Bitonic’s platform only supports transactions to the customer’s own wallet and does not facilitate transactions with third parties. For Bitonic, the registration requirement nevertheless means that prior to all transactions of its customers, regardless of the transaction amount, it must take measures to ensure that the crypto address used is actually used by the customer himself and not by another party or counterparty. According to Bitonic, these measures are not only ineffective and disproportionate, but also violate European law as the Dutch legislator and DNB have implemented the registration obligation under the Directive effectively in the form of a permit requirement, with extensive prior auditing.

The judgement

The Preliminary Relief Judge expresses doubts as to whether DNB, in view of the aforementioned Directive and other legislation, was allowed to elaborate the registration requirement in the manner in which DNB has done. However, the fact that doubts exist about the legality of the stated registration requirement does not mean that it must be considered that the requirement is clearly incorrect or unlawful. According to the Preliminary Relief Judge, this requires a more in-depth investigation, for which summary proceedings are not well suited. DNB is therefore ordered to take a decision in administrative proceedings within six weeks time. If necessary, Bitonic can appeal this decision and have the registration requirement reviewed in substantive proceedings.

Crypto service providers active in the Netherlands are advised to closely monitor developments in the coming weeks and months.


Do you have questions about the legal aspects of blockchain or crypto services? Feel free to contact our team.

Jeroen van Helden, attorney at law IT, IP & Privacy